Harvard Business School raises a record $598.7m

By Robert Weisman, Globe Staff | February 9, 2006

Harvard Business School has raised nearly $600 million in a multi-year capital campaign that will fund student financial aid, faculty recruitment, technology initiatives, new global research centers, and building projects on the school's campus along the Charles River.

The school said the sum, which is set to be publicly disclosed today, is the largest ever raised by any business school and surpassed Harvard's goal of $500 million. That goal was established when the capital campaign was formally launched in 2003, though business school leaders and fund-raisers laid the foundation for the campaign by soliciting early commitments from large donors as far back as 2000.

In the end, more than 22,000 alumni, about a third of Harvard's master of business administration and executive education graduates, gave money to the effort.

It was the first such capital campaign in Harvard Business School's 98-year history, though the school has annual fund drives. Most of the buildings standing on its Boston campus today were funded by a $5 million gift in 1924 from George Baker, president of First National Bank of New York. Some buildings were underwritten by subsequent gifts from individuals or classes.

The business school's operating budget is separate from the Harvard University budget.

The capital campaign was an effort by the school to address sweeping changes, from technology to globalization, transforming business, and higher education at the start of the new century. Even as the campaign continued, some of the money raised was used to fund construction projects, including the new Spangler Campus Center and Hawes Hall classroom building and renovations to the campus's iconic Baker Library and Sherman Hall, which provides office space for doctoral students.

''We have what's going to be a much better and more functional campus" as a result of the funds, said acting Harvard Business School Dean Jay Light. ''We did things that we really needed to do, and that will make the student experience much better."

The Wharton School at the University of Pennsylvania, another leading business school, raised close to $450 million in a capital campaign that closed in 2003.

The capital campaign's chairman, North Carolinian C.D. ''Dick" Spangler Jr., a former president of Harvard University's Board of Overseers who earned his MBA from Harvard Business School in 1956, said he was gratified that so many alumni contributed. Spangler and his family were early major donors, but asked the school not to disclose the amount of their contribution to protect their privacy. ''I feel very confident the resources obtained will be very wisely spent," he said.

Spangler, who is also a retired president of the Bank of North Carolina and of the University of North Carolina, said he was tapped by former Harvard Business School dean Kim B. Clark early in the decade to head the fund-raising effort. Spangler likened Clark's overture to receiving an unwelcome ''cold call" from a professor at the school's Aldrich Hall during his student days.

''Like most people, I have reasonable common sense, and I didn't volunteer," Spangler recalled in jest. ''I told Dean Clark, 'I can't believe we're doing this. You've never done this before, the school's never done it before. We're in a recession. And I'm from the South."

Surmounting those obstacles, the capital campaign, which raised a total of $598.7 million, exceeded targets for each of its priority areas:

For student scholarships and financial aid, the campaign raised $114 million, compared with a goal of $100 million.

For faculty recruiting and development, it raised $100.2 million, compared with a goal of $100 million.

For technology infrastructure, it raised $125.3 million; the goal was $120 million.

For global research and outreach, it raised $127.5 million, versus a goal of $100 million.

And for campus renewal, it raised $85.7 million, compared with a goal of $80 million.

The capital campaign also raised about $62.8 million in undesignated and unrestricted gifts. The total was adjusted downward by accounting changes that credit planned gifts at present value. Rae Goldsmith, vice president at the Council for Advancement and Support of Education, an educational fund-raising association in Washington, said capital campaigns are more common at universities than at business or other schools within universities.

''What a school will do when it plans a capital campaign is to define its priorities and try to match them with the interests of potential donors," Goldsmith said. ''Private giving allows an institution to create and develop a margin of excellence. It can make the difference between a very good institution and an excellent institution, a great institution."

Of the funds raised in Harvard Business School's capital campaign, about $440 million went directly to the business school's endowment, a collection of more than 800 funds currently valued at about $2.1 billion. The business school's endowment is pooled with Harvard University's overall endowment, estimated at nearly $26 billion, which is invested by Harvard Management Co.